The Budget which referred to in our previous Briefing 2 has now been approved in Portuguese Parliament at the end of November, with some alterations. Specifically in relation to the Non Habitual Residency programme some transitional provisions have been approved which will enable certain classes of applicant to apply on or before 31st December 2024.

Benefits of the NHR in brief

After registering as Portuguese tax resident, and applying successfully, NHRs will immediately be able to enjoy the benefits of the programme including: a preferable tax rate on pension (10%); and an exemption on salary, consulting, dividend, royalty, interest and property income, provided certain conditions are met. NHRs can also benefit from a flat rate of tax of 20% on certain sources of Portuguese income.

Changes to the NHR Programme

Existing NHRs

Existing NHRs will continue to enjoy the benefits of the programme until the end of their 10 year term.

Registration under the existing programme

Registration as tax resident can be made under the existing NHR programme on or before 31st December 2023. This registration as tax resident will satisfy the NHR application requirement, provided that the NHR registration is then made on or before 31st March 2024.

Transitional Provisions

In addition to this, a proposal has been approved introducing transitional arrangements allowing applications on or before 31st December 2024 provided that the applicant has:

  1. a promise or a contract of employment, promise or agreement of a promise or contract of employment, promise or agreement of secondment concluded by 31 December 2023, the performance of which must take place in national territory; or
  2. a lease agreement or other agreement granting the use or possession of real estate in Portuguese territory signed on or before 10 October 2023; or
  3. a reservation contract or promissory contract for the acquisition of real rights over real estate in Portuguese territory signed by 10th October 2023; or
  4. an enrolment or enrolment of dependents in an educational establishment in Portuguese territory, completed by 10 October 2023; or
  5. a residence visa or residence permit valid until 31 December 2023 or has started the process on or before 31st December 2023 for the granting of a residency visa specifically through the requesting of an appointment or effective appointment for the submission of the request for the granting of a residency visa or residency title or even through the application for the granting of a residency visa or residency title.

New tax programme – Incentivised Tax Status (“ITS”)

We can now confirm that, under the new ITS programme the following benefits will be available under the same pre-conditions as the NHR programme i.e. not having been tax resident in Portugal in the past 5 years and registered as a Portuguese Tax resident.

  • 20% Rate

Professionals exercising certain activities will be entitled to a flat tax rate of 20% for 10 years.

  • Exemption on capital income

Professionals exercising these activities will be exempt from tax on foreign capital income including dividends, royalties, interest, property income and capital gains.

  • 50% Exemption

A tax exemption on 50% of professional income (including self-employment/consulting income) up to the amount of €250,000 for a period of 5 years.


13th December 2023

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